This car cost can guzzle your cash, so it pays to do a quick check

Busy lifestyles and a lack of understanding can cause many motorists to waste money by failing to check one key expense.

Automatic cars are great if you don’t like changing gears, but choosing automatic car insurance renewals can painfully crunch your finances.

COVID-19 has changed car usage dramatically for many households, prompting finance specialists to encourage Australians to check their car insurance policies now.

While some consumers have experienced falling insurance costs during the pandemic, new research by comparison website iSelect has found more than 40 per cent have seen their premiums rise this year despite not making a claim.

Many rises stem from customers taking a set-and-forget approach to cover, rather than checking with their own insurer or rivals for a better deal, says iSelect spokeswoman Laura Crowden.

Laura Crowden from iSelect says a set-and-forget approach to insurance can be costly.

“The main reason so many of us simply auto-renew comes down to time and effort – some probably intend to shop around but don’t end up getting around to it before the renewal date rolls around,” she says.

“For insurers, customers simply auto-renewing means they keep their existing customers with minimal effort and can focus their efforts on attracting new customers.”

Crowden says consumers can save money on car insurance by:

• Regularly reviewing their policy and taking time to get a few quotes from competitors each year.

• Combining multiple cars under one policy.

• Ensuring they are getting the maximum discount based on their driving and claims history.

“Your rating should move with you even if you change insurer or policy type,” she says.

Consumer finance specialist Lisa Montgomery says competition among insurance companies is strong and diverse, and some offer lower premiums to people who drive less, so it’s wise to check rather than renew automatically.

Car insurance is vital but you don’t have to waste money by not reviewing your premium.

“Anything that’s set and forget will end up costing you money in the long run,” she says.

“You might find your insurance provider for other things may give you a discount if you move it over.”

Montgomery suggests checking online reviews of different insurance providers, and if you do consider switching make sure the new policy isn’t simply cheaper because it reduces your cover and benefits.

Insurers usually offer the best deals to new customers, so find out what that is and ask to be charged the same lower premium because you’re a loyal customer.

“If it’s going to save you $300 or $400 a year it’s clearly worth it,” Montgomery says.

@keanemoney